A small fall in the cost of clothes and footwear nudged the consumer price index (CPI) inflation rate down to 0% in August, with food and motor fuel prices holding the rate down this year.
The Office of National Statistics reported falls in food and motor fuel prices reduced the CPI 12-month rate by approximately 0.7% over the year to August. However, the cost of household goods has hovered at around 0.0% since February this year.
The seasonal increase in clothing prices rose between July and August as autumn ranges hit the shelves after the summer sales, but its a smaller uplift than last year at 1.5%.
In contrast, petrol and diesel prices fell between July and August by 6.2p and 2.4p respectively, but sea fares, soft drinks and furnishings rose offsetting the downward pulls.
Howard Archer, chief UK and European economist at IHS Global Insight, said: “With consumer price inflation flat in August and core inflation easing back to 1.0%, there is little immediate pressure on the Bank of England to start raising interest rates.”
Last week, the Monetary Policy Committee held interest rates at 0.5% and QE (quantitative easing) at £375bn, which was broadly expected.
The minutes showed the vote at 8 – 1, with Ian McCafferty once again voting for a 0.25% increase, where the QE vote to hold was unanimous.
Victoria Hartley is contributing editor at Mortgage Solutions, Specialist Lending Solutions, Your Money and Your Mortgage at London-based publishing company AE3 Media.
She has an MA in Radio from Goldsmiths after gaining a 2:1 in a Comparative American Studies BA at Warwick University. She also holds a TEFL qualification and taught overseas in Mexico and Japan from 1994 to 1997.
Her role includes editorial oversight of the news, analysis and features, event content management and strategic and editorial consultancy for the AE3 Media group. She is an experienced video, broadcast and live-event host and regularly chairs web and podcast debates and interviews.
Multiple award nominations have resulted in two wins: Santander Media Awards, trade journalist of the year and Headlinemoney Awards, mortgage journalist of the year (B2B). Here is one of the award-winning pieces: https://www.mortgagesolutions.co.uk/news/2011/07/21/exclusive-tale-bailey-fraud-witness/
Previous roles include editorships of Mortgage Solutions, consumer title What Mortgage and trade title Credit Today as well as a stint freelancing for a variety of outlets including The Guardian and Which? Money.
